Our market development work is important to achieving our statutory objective to promote competition in, reliable supply by and the efficient operation of the electricity industry for the long-term benefit of consumers.

If an anomalous event or outcome occurs in the market or the broader electricity sector, we investigate it to determine the causes and whether something can or should be done to prevent such an event or outcome from occurring again.

The cause of these infeasible prices was a binding transmission security constraint in the Otago region.

Attempts over the next day or so to resolve the infeasibilities and publish final prices were unsuccessful. In accordance with clause 13.164 of the Code, the pricing manager ultimately decided to publish prices based on manual calculations.

Manual price calculation ought to be a last resort measure as it represents a departure from the efficient pricing delivered by the market clearing engine (SPD).

After reviewing the events of 26-28 February 2013,we recommend that the system operator modify its procedures for resolving price infeasibilities.

A model-based approach would have easily remedied the recurring infeasibilities relating to trading period 31 on 26 February 2013 without resorting to manual price calculations.